Common Difficulties When Launching A Startup
No market demand (42%)
The main problem is that the entrepreneur sees the world through his prism of perception and is sure that he is right. Accordingly, he often runs after the idea of blindly believing in it and not looking around, that is as if doing the project not for the users, but rather for himself.
This problem may look in different ways: this is a fundamentally wrong idea, and the lack of research at the start, and an attempt to make the most sophisticated product, which leads to its excessive complexity and non-acceptance on the market, and for so long development that the market changes and the product becomes unclaimed before its release. Often, we are forced to build “spacecraft”, the development of which has been lasting for years. The project is either never completed, or becomes non-innovative. And there are cases when the entrepreneur does not even know that such ideas have long been working in the market.
Lack of funds (29%)
Have you often seen new projects in which extra money was left for the start? We think it happens very rare. The budget must be taken with a margin.
We have repeatedly seen how huge projects were created, for the implementation of which there were no funds, and they were closed. It is a false statement speaking it is easy to find investment. At best, you can find a very small amount in the company, and these funds are most likely not enough.
Spending money without cause at the very beginning of the project is a common misfortune. For some reason, few people follow the principle of a “lean startup”. Excessive savings, however, also does not lead to the desired result. I have seen countless cases where a startup has tried to save on things that were not necessary to save. The cost of an hour for different specialists may differ by several times, and the quality – by tens of times.
Wrong team (23%)
Internet projects are highly intelligent products, so the team is the main thing here. We would generally put the team in the first place because the right people can handle almost any problem we are describing.
We have seen many times how people were chosen in terms of the price of their work, and not in terms of their competencies. It doesn’t mean that you need to choose the most expensive staff. It is necessary to choose the most competent in a particular narrow subject, and if you are lucky there will be 2 or more competent ones.
Often, not only one specialist is required, but a whole team of specialists in a narrow field. The problem with the team is even more acute because there are very few high-quality professional teams, and it’s a long and risky task to assemble a team.
The basis of a successful team is a triangle: a cool manager, a cool sales assistant and a cool programmer.
The market has long been saturated, there are very few free niches. First, you need to see if there are any projects with a similar idea: if there is, it will be extremely difficult to move the leader. We often saw them start making copies of successful products. This is a very bad idea, almost doomed to failure. If you make a product with a similar idea, then you need a very good budget for implementation and marketing, and you also need to think about exactly how your product differs and how it can differentiate you from competitors.
Often people make a product without taking into account the possibilities of large market players. Make additions to existing ideas as additional services. This is also a very ambiguous way: the existing project has its own users and resources to quickly realize such additional service within its project.
When starting a project, you need to spend a lot of time researching competitors and the market.
Price policy (18%)
This problem lies in the ignorance of the market and consumers. You can invest millions of dollars in useful service, but the value of the product may be lower than its cost. Therefore, at this price, no one will buy it. If you make the price even lower it will not pay off.
Less often, the team does not conduct research on competitors’ price, and the project does not enter the market according to the price category. The price policy should be examined first of all.
There is no business model (17%)
Many startups do not think at first how they will earn, who will pay them and how much, and what they will pay for. This is the so-called customer development stage. Make a startup for a startup.
At the first stages of work, we are trying to work through this issue. Many startups think that you first need to start a project, and only later it will be clear how to make money from it. This is a mistake, you need to think about money right away.
Weak marketing (14%)
In a good way, marketing costs must exceed development costs several times. In reality, most startups assess future development costs and but not marketing costs. For some reason, they are sure that the main thing is to launch the project, and if the product is cool, then it will be sold and promoted as it is. History knows cases when the product promoted itself, but these are exceptions to the rules, and all of them are associated with innovative products that have no strong competitors.
Any startup should have a marketing plan and cost calculations. It will be corrected and, probably, more than once, but you need to get the information about the costs as early as possible.
We saw a lot of startups that run in competitive markets and almost did not invest in marketing, which led to very poor results. Not less often we met innovators who did something unique and new, hoping that the product would be interesting and clear for everyone. The market does not work that way. Most often, innovative ideas need to literally create a market.
The focus is lost (13%)
The basic idea of a startup almost always changes within time. Often startups even do a full restart of projects with new ideas. And when you think about the project possibilities, you always want to make some additional functions that “would be useful”. And so the unique idea is covered with standard functions and is lost among them.
In our practice, there was a project with a unique idea, which after-acquired functions of an ordinary social network and the initial idea turned into a small block in the user profile. As a result, the entire project was thrown out and redone from the very beginning.
Not enough dedication (9%)
It happens that the startup idea ceases to please the creator. Whether he has new opportunities or the market was not as interesting as he imagined, or he just burned out.
Tags: Business, Startup